London, July 22: Copper futures on the London Metal Exchange (LME) rose on Tuesday, hitting a three-week high, mainly driven by expectations of stronger Chinese demand and hopes that China and the United States may reach a tariff agreement.
As of 1620 GMT, LME three-month copper rose 0.50% to $9,910 per ton, the highest level since July 4.
On Tuesday, US COMEX copper futures rose 1.2% to $5.71 per pound, and the premium of COMEX copper futures over LME copper futures reached $2,673 per ton.
Analysts said that China's work plan to stabilize industrial growth and the start-up of large hydropower stations in Tibet sent positive signals to the metal market.
On Tuesday, US Treasury Secretary Scott Bessant said he would meet with his Chinese counterpart in Stockholm next week to discuss a possible extension of the August 12 deadline to avoid a significant increase in tariffs, which also made investors hopeful about the prospect of a deal between China and the United States.
The dollar exchange rate continued to fall on Tuesday, which also supported the prices of metals priced in dollars.
On Tuesday, LME aluminum prices rose to a four-month high, with three-month aluminum rising 0.2% to $2,652.50 per ton, and hitting a high of $2,660 since March 21 in early trading.
The main aluminum contract on the Shanghai Futures Exchange rose 0.75% to 20,900 yuan ($2,913.26) per ton, the highest level since November last year. Analysts said that among Chinese metal varieties, aluminum has the most solid fundamentals.
However, some analysts are cautious about the room for metal prices to rise. Dan Smith, managing director of Commodity Market Analysis, said there are many reasons to be cautious about the trend in the next month, and base metal prices may fall back. Although the Federal Reserve is under pressure to cut interest rates, inflationary pressures in the United States may be intensifying. The period to September is also a seasonally weak period for demand.
Closing prices of other metals were: LME zinc futures rose 0.6% to $2,854 per ton; nickel futures rose 0.1% to $15,530 per ton; tin futures rose 0.1% to $33,850 per ton; lead futures fell 0.2% to $2,010.50 per ton.
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